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A bleak backdrop: London’s living standards ahead of 2024’s election

Matt Padley-0669 headshot
Matt Padley-0669 headshot

Author: Matt Padley, co-director, Centre for Research in Social Policy

How much do you need to earn to reach an acceptable standard of living in the capital? We fund the Minimum Income Standard London, which explores this question. Here, Professor Matt Padley reflects on what the research tells us about living standards ahead of May's London elections.

For the last decade we’ve been researching what the public agree everyone needs for a decent, minimum living standard in London. This minimum is about being able to cover essential costs – food, clothes, shelter. But critically it’s also about being able to take part in society. The amount you need to live with dignity in London, and not be excluded from the sorts of things that enable us all to thrive, rather than just survive.

In shifting circumstances, the Minimum Income Standard (MIS) for London research provides an annually updated benchmark against which we can track what’s been happening to living standards.

A decade on from our initial research, there has been little change in the big questions facing the capital: how do we ensure that all those working in London are able to live in the city, in affordable and appropriate housing? How do we build on and develop existing transport infrastructure so that it works for all, right across London?

Ahead of the Mayoral elections in May 2024, it’s helpful to reflect on the state of living standards and what this means for policy.

A bleak backdrop

The past few years have seen some of the biggest challenges to living standards in decades. Rapid increases in the cost of food and home energy have piled pressure on already squeezed household budgets. The cost of housing has risen substantially for many, with large increases in private rents and the cost of mortgages. At the same time, support for households through our social security system has not kept pace with these sharp increases in costs, falling well short of meeting even the most basic of needs.

Rapid increases in the cost of food and home energy have piled pressure on already squeezed household budgets.

Looking across the different indicators that help us track what is going on makes for grim reading:

  • In 2022, 1.8 million households were living in destitution, with London having the highest rates in the UK
  • The latest poverty data (for 2020/21-2022/23) show that 24% of individuals in London were living below the poverty line
  • The Trussell Trust distributed nearly 3 million food parcels in 2022-23, an increase of more than a third on the previous year
  • 7.2 million individuals – 11% of the population of the UK – are living in households that are food insecure

London living standards

The Minimum Income Standard research is carried out by speaking to groups of members of the public, to determine what people think is needed for a minimum standard of living. Since we started this research 10 years ago, the core of what is needed for a minimum decent standard of living hasn’t changed much. Many of the things that the public agree are needed have remained the same over time – access to the internet, birthday presents for children, or an occasional meal outside the home.

Around four out of every 10 people living in London don’t have the income they need for a minimum standard of living.

What’s changed substantially over the last decade is the cost of reaching this minimum for all households. Our latest research in London points to the challenges facing many Londoners in meeting their minimum needs – in being able to live with dignity in the capital.

  • Around four out of every 10 people living in London (39%) don’t have the income they need for a minimum standard of living
  • More than a third (35%) of pensioners are living below this minimum level in London. This is up from 25% in 2011, and compares to just more than a fifth (20.5%) in the UK has a whole
  • Working full time on the National Living Wage, a single working-age adult in Inner London in 2023 had only 54% of what they need to reach MIS, compared to 67% in the rest of the UK
  • Nearly half of all children are in the capital (48%) are growing up in households with incomes below this level. This means that nearly a million children are living in households that are having to make really difficult decisions about what to prioritise
  • Over three quarters (76%) of people living in social housing in London are below MIS, compared to 65% outside the capital

While these figures give an indication of the scale of the challenge, behind these are individuals and households forced to make impossible decisions about what to prioritise, what to go without, which bills to pay. This lack of choice has serious material consequences for individuals, but also brings short and long term costs to society and our economy. The cost of declining living standards are not just affecting the day-to-day lives of people living in London, but putting strains on already over-stretched public services.

What can we do?

In the face of these extreme challenges, it can be all too easy to lose sight of what is possible and what can be done to ensure that all are able to live with dignity. Acknowledging that this is about taking an holistic approach to living standards is a good place to start. It’s not enough to just address the costs that put particular pressures on incomes, without also taking steps to improve incomes, increasing the amount that those on low-middle incomes get to keep.

More concretely, we need to continue to work to address the challenge of housing in London. This is not just about affordability, although the 10.6% increase in private rents in the last year in London indicates the importance of addressing this. It is also about ensuring that housing works – is good quality, accessible and meets needs.

It’s not enough to just address the costs that put particular pressures on incomes, without also taking steps to improve incomes.

We need to ensure that people are able to move around London in ways that are affordable and accessible, and that transport is enabling rather than being a barrier.

We need to support the most vulnerable households in meeting their minimum needs, through support such as the free-school meals programme for all primary school children. Extending this to secondary schools could make a real difference to a substantial number of households.

We need more employers to commit to paying the Real Living Wage in London, as well as working to strengthen job security and stability, and building in clear routes for progression.

All of this will help to build a London that functions for everyone.